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Notes to Accounts of Elnet Technologies Ltd.

Mar 31, 2017

1. Segment wise reporting as per standard AS 17 is not applicable to the company as the company collects only compensation from its tenants.

2. DISCLOSURE ON SPECIFIED BANK NOTES (SBNS)

During the year, the company had specified bank notes or other denomination notes as defined in the MCA Notifications G.S.P. 308 (E) dated March 31, 2017 on the details of Specified Bank Notes (SBNs) held and transacted during the period from November 8, 2016 to December 30, 2016.The denomination wise SBNs and other notes as per the notification is given below:

*For the purpose of this clause, the term “Specified Bank Notes” shall have the same meaning prescribed in the notification of the Government of India in the Ministry of Finance, Department of Economic Affairs number S.O.1407(E),dated November 8, 2016.

Basic & diluted earnings per share (EPS ) computed in accordance with AS-20 - Earnings per Share

3. Deferred Tax Liability /Asset

As per the Accounting Standard “AS 22”, the Company is required to make a provision for “deferred tax liability/ asset”. During the year an amount of Rs. 32.21 Lakhs has been recognized for deferred tax asset.

The balance deferred tax liability (net) outstanding as on 31.03.2017 is Rs. 62.63 Lakhs the details of which are as follows:

4. DIMUNITION IN INVESTMENT IN SUBSIDIARY COMPANY ELNET SOFTWARE CITY LTD

The Company''s investment in its subsidiary, Elnet Software City Limited is Rs.10 lakhs. Considering the erosion of net worth and the intention of the management to wind-up its subsidiary, it is considered that the diminution in carrying value of the investment in the subsidiary is other than temporary in nature. Consequently, the Company has made a provision for diminution, for an amount of '' 441,981 and disclosed the same under exceptional item in the statement of Profit and Loss.

5. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

Wind Mill

During the financial year, the Company sold 12,82,363 units to Tamilnadu Electricity Board. (2016 : 7,45,176 units).

6. DISCLOSURES REQUIRED UNDER SECTION 22 OF THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:

(a) The principal amount remaining unpaid as at 31 March 2017 in respect of enterprises covered under the “Micro, Small and Medium Enterprises Development Act, 2006” (MSMDA) is Rs.24,559 (previous year: Rs. Nil). There was no interest amount payable based on the provisions under Section 16 of the MSMDA.

(b) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act is Rs. Nil (previous year: Rs. Nil).

(c) The list of undertakings covered under MSMDA was determined by the Company on the basis of information available with the Company and has been relied upon by the auditors.

7. Current Liabilities

(i) The company continues to hold the amount of Rs.1,46,503/- (2016: Rs.1,46,503/-) on account of Interest payable on FD made out of disputed dividend for the years 200001 and 2001-02.

(ii) There are no amounts due to the Central Government on account of Investor Education and Protection Fund as on 31.03.2017. The balance amount lying under the Unpaid Dividend Account 2009-2010 declared on 21.07.2010 for the year 200910 falls due on 24.08.2017.

8. Statement of Profit and Loss

Electricity Expenses have been reduced to the extent of Rs.86,67,030 /- (2016: Rs.50,46,017/-) for sale of electricity generated from windmill. There is no impact on the statement of Profit and Loss.

9. Estimated amount of liability on capital contracts as on 31.03.2017 not provided for is Rs. Nil. (Previous year Rs. Nil).

10. Contingent Liabilities in respect of:

Claims against the Company not acknowledged as debt

(i) Income Tax demand

There is a dispute with regard to the treatment of income of the company by the Income Tax Department as “Income from House Property”, whereas in the opinion of the Company, the income should be treated as “Income from Business”, which has been confirmed by the Income Tax Appellate Tribunal.

In respect of Assessment Years 1996-97,1998-99, 2000-01 & 2001-02, the Madras High Court has decided the case in favour of the Company. The Department has filed a special leave petition with the Supreme Court. In the event the Supreme Court reverses the order of the High Court of Madras, there will be a contingent liability of Rs.100.58 Lakhs.

In respect of Assessment Years 2003-04, the Income Tax Department had preferred an appeal before the High Court of Madras against the orders issued by the Income Tax Appellate Tribunal which was passed in favour of the company. In the event there is a reversal of the order, there will be a contingent liability of Rs.389.22 Lakhs.

In respect of Assessment Years 2007-08 and 2009-10, the case is pending with the Commissioner of Income Tax -Appeals. The contingent liability in this regard amounts to Rs.11.78 Lakhs.

(ii) Service Tax:

The company had received show cause notice from the Office of the Commissioner of Service Tax on the applicability of service tax on Electricity charges reimbursed from the occupants including generation from Generator for the period April 2006

- March 2012. As per legal opinion, the company has been advised that, it is not liable for service tax on this issue. The company had obtained an interim stay from the High Court of Madras against the show cause notice which was modified by the High Court. The company filed a fresh Writ Petition for stay and an order was received in September 2014 directing the company to represent before the Service tax department and the same has been complied. In view of this, there is a contingent liability of Rs.282.64 Lakhs.

(iii) Lease Rent :

In respect of claim made by ELCOT during the year 2009-10 for a sum of Rs.9.56 crores towards difference in the computation of Lease Rent for the period from 14.02.1991 to 14.01.1999, the Company prima-facie has reasons that the claim is not tenable and hence, no provision is considered necessary.

Previous year’s figures have been re-grouped / re-classified wherever necessary to correspond with the current year’s classification / disclosure.


Mar 31, 2016

1. EXPLANATORY STATEMENT

1.1 Retirement benefits to employees

(i) Defend Contribution Plan

Provident fund

In respect of defined contributions schemes, contributions to Provident Fund and Family Pension they are charged to the statement of Profit and Loss as incurred.

(ii) Defend benefit plan

gratuity

The Company provides for gratuity, a defend benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of fve years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Elnet Technologies Ltd Employees'' Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

iii leave encashment

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 180 days. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date based on actuarial valuations which is non funded.

Basic & diluted earnings per share (EPS ) computed in accordance with AS-20 - Earnings per Share

2. Deferred Tax liability /Asset

As per the Accounting Standard "AS 22", the Company is required to make a provision for "deferred tax liability/ asset". During the year an amount of Rs, 68,75,275/- has been recognized for deferred tax asset.

3. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

3.1 Wind Mill

During the financial year, the Company sold 7,45,176 units to Tamilnadu Electricity Board. (2015 : 9,14,071 units).

4. Disclosures required under section 22 of the Micro, small and Medium Enterprises Development Act, 2006:

i) There were no dues to Small Scale Industrial undertakings to whom the Company owes any sum which is outstanding for more than 30 days.

ii) There were no dues either principal or interest remaining unpaid to any suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, which came into force with effect from 02.10.2006 as at the end of the accounting year. Similarly, no payments have been made to the suppliers beyond the appointed day.

5. current liabilities

(i) The company continues to hold the amount of Rs, 1,46,503/- (2015: Rs, 1,46,503/-) on account of Interest payable on FD made out of disputed dividend for the years 2000- 01 and 2001-02.

(ii) There are no amounts due to the Central Government on account of Investor Education and Protection Fund as on 31.3.2016. The balance amount lying under the Unpaid Dividend Account 2008–2009 declared on 07.07.2009 for the year 2008- 09 falls due on 08.08.2016.

6. Statement of Profit and Loss

Electricity Expenses have been reduced to the extent of Rs, 47,31,868/- (2015 : Rs, 50,38,648/-) for sale of electricity generated from windmill. There is no impact on the statement of Profit and Loss.

7. Estimated amount of liability on capital contracts as on 31.03.2016 not provided for is Rs, Nil . (Previous year Rs, Nil ).

8. claim by Department of Telecommunications:

The Department of Telecommunications (DoT) fled a claim against the company for Rs, 20,82,233/- before the Sole Arbitrator in the matter of payment towards license fees and interest thereon. The Arbitrator''s award was made in June 2005 according to which a sum of Rs, 5,48,288 and interest there on was payable by the company to DoT. The company accepted the award and decided to effect the payment after waiting for the appeal period. However, DoT had fled an appeal in the High Court of Delhi against the Arbitrator''s award which has since been dismissed by the Honourable High Court of Delhi by an order dated 21 Dec 2015 thereby reinstating the order passed by the Honourable Arbitral Tribunal. Accordingly, in line with said award, the company has affected the payment along with interest of 6% p.a. up to date on 31 Mar 16 in discharge of its obligation.

9. contingent liabilities in respect of:

claims against the company not acknowledged as debt

(i) Income Tax demand

There is a dispute with regard to the treatment of income of the company by the Income Tax Department as "Income from House Property", whereas in the opinion of the Company, the income should be treated as "Income from Business", which has been confirmed by the Income Tax Appellate Tribunal.

In respect of Assessment Years 1996-97,1998-99, 2000-01 & 2001-02, the Madras High Court has decided the case in favour of the Company. The Department has fled a special leave petition with the Supreme Court. In the event the Supreme Court reverses the order of the High Court of Madras, there will be a contingent liability of Rs, 100.58 Lakhs.

In respect of Assessment Years 2003-04, the Income Tax Department had preferred an appeal before the High Court of Madras against the orders issued by the Income Tax Appellate Tribunal which was passed in favour of the company. In the event there is a reversal of the order, there will be a contingent liability of Rs, 389.22 Lakhs.

In respect of Assessment Years 2007-08 and 2009-10, the case is pending with the Commissioner of Income Tax –Appeals. The contingent liability in this regard amounts to Rs, 11.78 Lakhs.

(ii) service Tax:

The company had received show cause notice from the Office of the Commissioner of Service Tax on the applicability of service tax on Electricity charges reimbursed from the occupants including generation from Generator for the period April 2006 – March 2012. As per legal opinion, the company has been advised that, it is not liable for service tax on this issue. The company had obtained an interim stay from the High Court of Madras against the show cause notice which was modified by the High Court. The company fled a fresh Writ Petition for stay and an order was received in September 2014 directing the company to represent before the Service tax department and the same has been complied. In view of this, there is a contingent liability of Rs, 282.64 Lakhs.

(iii) lease Rent :

The Company had received a communication from ELCOT claiming a sum of Rs, 9.56 crores towards difference in the computation of Lease Rent for the period from 14.02.1991 to 14.01.1999. The Company prima-facie has a strong reason that the claim is not tenable and is evaluating various options, including legal recourse. Pending any such actions no provision has been made.


Mar 31, 2014

Not Available


Mar 31, 2013

1. GENERAL INFORMATION

Elnet Technologies Limited (ETL) was incorporated in August 1990 as a Public Limited Company which is situated in the IT corridor, Rajiv Gandhi Salai, Taramani, Chennai. ETL''s core competence is to develop and manage Software Technology Park. ETL has pioneered the concept of Software Technology Park in India and also providing infrastructure to IT and ITES.

2. EXPLANATORY STATEMENT

2.1 Retirement benefits to employees

(i) Defined Contribution Plan Provident fund

In respect of defined contributions schemes, contributions to Provident Fund and Family Pension they are charged to the statement of Profit and Loss as incurred.

(ii) Defined benefit plan Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Elnet Technologies Ltd Employees'' Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

iii Leave encashment

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 180 days. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date based on actual valuations.

2.2 Segment wise reporting as per standard AS 17 is not applicable to the company

2.3 Accounting for leases

During the year 1995-96, the Company has completed the construction of its IT Park at Taramani, Chennai and leased out the entire completed portion of the premises. The disclosure required for operating leases under AS 19 is given below:

2.4 Deferred Tax Liability /Asset

As per the Accounting Standard "AS 22" issued by the Institute of Chartered Accountants of India (ICAI), the Company is required to make a provision for "deferred tax liability/ asset". During the year an amount of Rs. 16,87,353/-has been recognized for deferred tax asset.

3. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

3.1 Wind Mill

During the financial year the Company sold 13,15,030 units to Tamilnadu Electricity Board. (2012 : 10,98,647 units).

3.2 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

i) There were no dues to Small Scale Industrial undertakings to whom the Company owes any sum which is outstanding for more than 30 days.

ii) There were no dues either principal or interest remaining unpaid to any suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, which came into force with effect from 02.10.2006 as at the end of the accounting year. Similarly, no payments have been made to the suppliers beyond the appointed day without adding interest, no interest is accrued and remaining unpaid during the year.

3.3 Current Liabilities

i. The company continues to hold the amount of Rs. 1,46,503/- (2012: Rs. 1,46,503/-) on account of Interest payable on FD made out of disputed dividend for the years 2000-01 and 2001-02.

ii. There are no amounts due to the Central Government on account of Investor Education and Protection Fund as on 31.3.2013. The balance amount lying under the Unpaid Dividend Account 2005-2006 declared on 06-05-2006 for the year 2005-06 falls due on 05.05.2013.

3.4 Statement of Profit and Loss

Electricity Expenses have been reduced to the extent of Rs. 72,32,665/- (2012 : Rs. 43,94,588/-) for sale of electricity generated from windmill. There is no impact on the statement of Profit and Loss.

3.5 Estimated amount of liability on capital contracts as on 31.03.2013 not provided for is Rs. 7,50,000. (Previous year Rs. 45,19,886/-)

3.6 Contingent Liabilities in respect of:

Claims against the Company not acknowledged as debt

(i) Claim by Department of Telecommunications

The Department of Telecommunications (DoT) filed a claim against the company for Rs. 20,82,233/- before the Sole Arbitrator in the matter of payment towards license fees and interest thereon. The Arbitrator''s award was made in June 2005 according to which a sum of Rs. 5,48,288 and interest there on is payable by the company to DoT. The company accepted the award and decided to effect the payment after waiting for the appeal period. However DoT has filed an appeal in the High Court of Delhi against the Arbitrator''s award. The Company accordingly recognized the total liability at Rs. 10,70,659/-as at 31.3.2013. The difference in claim amounting to Rs. 10,01,574/- is shown under "claims against the Company not acknowledged as debt".

(ii) Income Tax demand

There is a dispute with regard to the treatment of income of the company by the Income Tax Department as "Income from House Property", whereas in the opinion of the Company, the income should be treated as "Income from Business", which has been confirmed by the Income Tax Appellate Tribunal.

In respect of assessment years 1996-97, 1998-99, 2000-01, 2001-02 and 2003-04, the Income Tax Department has preferred appeal before the High Court of Madras against the orders issued Income Tax Appellate Tribunal. The High Court of Madras has ruled the case in favour of the Company. However, it is not known whether the department has preferred a special Leave petition before the Supreme Court. In the event the Supreme Court reverses the Order of the High Court of Madras, there will be a contingent liability of Rs. 415.56 lakhs.

(iii) Service Tax

The company received show cause notice in 2009-10 from the Office of the Commissioner of Service Tax on the applicability of service tax on Electricity charges reimbursed from the occupants including generation from Generator. As per legal opinion, the company has been advised that, it is not liable for service tax on this issue. The company has obtained an interim stay from the High Court of Madras on 28.08.2009 against the show cause notice. The above stay was modified by the High Court on 04.07.2012 based on a Supreme Court decision. As per the order, 50% of the arrears prior to 30th September 2011 to be paid and for the balance 50%, to furnish a solvent surety to the Department. The company has filed an application on 4th February 2013 for extension of stay. In view of this, there is a contingent liability of Rs. 282.64 lacs.

(iv) Lease Rent

The Company received a communication from ELCOT claiming a sum of Rs. 9.56 crores towards difference in the computation of Lease Rent for the period from 14.02.1991 to 14.01.1999. The Company prima-facie has a strong reason that the claim is not tenable and is evaluating various options, including legal recourse. Pending any such actions no provision has been made.

Previous year''s figures have been re-grouped / re-classified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1. disclosures under accounting standards

1.1 Retirement benefits to employees

(i) Defined Contribution Plan Provident fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employee's Provident Fund scheme administer by Government of India equal to a specified percentage of the covered employee's salary.

The Company recognized Rs 5,44,911/= (2011 : Rs 4,99,151/-)for provident fund contribution in the statement of profit & loss. Further an additional contribution of Rs1,87,103/- (2011 : Rs 2,51,675/-) has been made to the Trust to meet the shortfall in managing the trust, being the "excess of expenditure over income". The Company has registered with the Regional Provident Fund Organisation with effect from March 2012.

(ii) Defined benefit plan Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Elnet Technologies Ltd Employees' Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

Investment details of plan assets :

Deposited with Life Insurance Corporation of India (Group gratuity policy).

iii Leave encashment

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 180 days. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date based on actual valuations.

1.2 ACCOUNTING FOR LEASES

During the year 1995-96, the Company has completed the construction of its IT Park at Taramani, Chennai and leased out the entire completed portion of the premises. The disclosure required for operating leases under AS 19 is given below:

1.3 Deferred Tax Liability /Asset

As per the Accounting Standard "AS 22" issued by the Institute of Chartered Accountants of India (ICAI), the Company is required to make a provision for "deferred tax liability/ asset". During the year an amount of Rs15,83,577/-has been recognized for deferred tax asset.

2. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

2.1 Secured Loans

The Company closed its secured loan on 8th March 2012. The Company filed Form 17 in respect of Satisfaction of Charges with the Registrar of Companies through the Ministry of Company Affairs portal and got the same approved.

2.2 Wind Mill

During the financial year the Company sold 10,98,647 units to Tamilnadu Electricity Board. (2011 : 13,11,299 units).

2.3 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

i) There were no dues to Small Scale Industrial undertakings to whom the Company owes any sum which is outstanding for more than 30 days.

ii) There were no dues either principal or interest remaining unpaid to any suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, which came into force with effect from 02.10.2006 as at the end of the accounting year. Similarly, no payments have been made to the suppliers beyond the appointed day without adding interest, no interest is accrued and remaining unpaid during the year.

2.6 Current Liabilities

(i) The company continues to hold the amount of Rs1,46,503/- (2011 : Rs 1,46,503/-) on account of Interest payable on FD made out of disputed dividend for the years 2000-01 and 2001-02.

(ii) There are no amounts due to the Central Government on account of Investor Education and Protection Fund as on 31.3.2012. The balance amount lying under the Unpaid Dividend Account 2004-2005 declared on 7.5.2005 for the year 2004-05 falls due on 6.5.2012.

(iii) Provision for taxation has been netted off against advance tax paid and tax deducted at source.

2.7 Statement of Profit and Loss

Electricity Expenses have been reduced to the extent of Rs 43,94,588/- (2011 : Rs 48,64,920/) from sale of electricity generated from windmill. There is no impact on the Statement of Profit and Loss.

2.8 Estimated amount of liability on capital contracts as on 31.03.2012 not provided for is Rs 45,19,886/- (2011 : Rs 28,48,967/-)

2.9 Contingent Liabilities in respect of:

Claims against the Company not acknowledged as debts.

(i) Claim by Department of Telecommunications

The Department of Telecommunications (DoT) filed a claim against the company for Rs 20,82,233/- (2011 : Rs 20,82,233/-)before the Sole Arbitrator in the matter of payment towards license fees and interest thereon. The Arbitrator's award was made in June 2005 according to which a sum of Rs5,48,288 and interest there on is payable by the company to DoT. The company accepted the award and decided to effect the payment after waiting for the appeal period. However DoT has filed an appeal in the High Court of Delhi against the Arbitrator's award. The Company accordingly recognized the total liability at Rs10,37,762/-as at 31.3.2012. The difference in claim amounting to Rs 10,44,471/- is shown under "claims against the Company not acknowledged as debts".

(ii) Income Tax demand

There is a dispute with regard to the treatment of income of the company by the Income Tax Department as "Income from House Property", whereas in the opinion of the Company, the income should be treated as "Income from Business", which has been confirmed by the Income Tax Appellate Tribunal.

In respect of assessment years 1996-97, 1998-99, 2000-01, 2001-02 and 2003-04, the Income Tax Department has preferred appeal before the High Court of Madras against the orders issued Income Tax Appellate Tribunal. In the event the High Court reverses the Order of the Income Tax Appellate Tribunal, there will be a contingent liability of Rs 415.56 lakhs (2011 : Rs 264.23 lakhs).

(iii) Service Tax:

The company received show cause notice in 2009-10 from the Office of the Commissioner of Service Tax on the applicability of service tax on Electricity charges reimbursed from the occupants including generation from Generator. As per legal opinion, the company has been advised that, it is not liable for service tax on this issue. The company has obtained an interim stay from the High Court of Madras on 28.08.2009 against the show cause notice. In view of this, there is a contingent liability of Rs 2,13,34,807/- (2011 : Rs 1,69,52,681/-).

(iv) The Company received a communication from ELCOT claiming a sum of Rs 9.56 crores towards difference in the computation of Lease Rent for the period from 14.02.1991 to 14.01.1999. The Company prima-facie has a strong reason that the claim is not tenable and is evaluating various options, including legal recourse. Pending any such actions no provision has been made.

(v) Other pending items under dispute - Nil (2011 : Nil)

4. The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

1. Secured Loans

a. Mortgage Loan

Primary Security

Assignment of rent receivables from all the present and future lessees of building situated at TS No.140, Block no. 2 & 9 , Rajiv Gandhi Salai, Taramani, Chennai 600 113.

Collateral Security

Registered mortgage of commercial property belonging to the company situated at TS No.140, Block 2 & 9, Rajiv Gandhi Salai, Taramani, Chennai -600 113 admeasuring land area of 3.16 acres with super built up area of 2.50 lacs sq.ft of ground floor + 7 floors.

First charge on other fixed assets of the company (including Windmill property)

2. Deferred Tax Liability /Asset

As per the Accounting Standard "AS 22" issued by the Institute of Chartered Accountants of India (ICAI), the Company is required to make a provision for "deferred tax liability/ asset". During the year an amount of Rs. 21,72,454/-has been recognized for deferred tax asset.

5. CURRENT LIABILITIES

(A)The company continues to hold the amount of Rs.1,46,503/- on account of Interest payable on FD made out of disputed dividend for the years 2000-01 and 2001-02 .

(B) There are no amounts due to the Central Government on account of Investor Education and Protection Fund as on 31.3.2011. The balance amount lying under the Unpaid Dividend Account 2003-2004 declared on 29.09.2004 for the year 2003- 04 falls due on 28.09.2011.

(C) Provision for Taxation (Income Tax payable) has been netted off against Tax Deducted at source & Advance Tax paid.

6. PROFIT & LOSS ACCOUNT

A) Electricity Expenses have been reduced to the extent of Rs.48,64,920/- (previous year Rs.50,30,154/-)from sale of electricity generated from windmill. There is no impact on the Profit & Loss Account.

B) Retirement benefits to employees

(1) Defined Contribution Plan

Provident fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employees Provident Fund scheme administer by Government of India equal to a specified percentage of the covered employees salary.

The Company recognized Rs. 4,99,151/= for provident fund contribution in the P&L account. Further an additional contribution of Rs.2,51,675/- has to be paid to the Trust to meet the shortfall in managing the trust, being the "excess of expenditure over income".

(ii) Defined benefit plan

1) Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Elnet Technologies Ltd Employees Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

e) Investment details of plan assets: Deposited with Life Insurance Corporation of India (Group gratuity policy).

(2) Leave encashment

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 180 days. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date based on actual valuations.

9. a) There were no dues to Small Scale Industrial undertakings to whom the Company owes any sum which is outstanding for more than 30 days.

b) Outstanding dues to Micro, Small and Medium Enterprises

There are no Micro and Small Enterprises to whom the Company owes dues, which are outstanding for more than forty five days as at 31st March 2011. The identification of Micro and Small Enterprises and the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act,2006 has been determined on the basis of vendor information available with the company.

The disclosure pursuant to the said Act is as under: Rs.

i. Principle amount and the interest thereon -

ii. Interest paid (along with payment made to suppliers) - beyond the appointed day during the year

iii. Interest due and payable for delay in making the payment -

iv. Interest accrued and remaining unpaid at the end of the year -

v. Further interest remaining due and payable in succeeding years -

10. Segment wise reporting as per standard AS 17 is not applicable to the company

11. Estimated amount of liability on capital contracts as on 31.03.2011 not provided for is Rs.28,48,967/-(Previous year Rs. 1,17,485/-)

12. Contingent Liabilities in respect of:

a) Claims against the Company not acknowledged as debts

(i) Claim by Department of Telecommunication

The Department of Telecommunication (DoT) filed a claim against the company for Rs.20,82,233/- before the Sole Arbitrator in the matter of payment towards license fees and interest thereon. The Arbitrators award was made in June 2005 according to which a sum of Rs.5,48,288 and interest there on is payable by the company to DoT. The company has accepted the award and had decided to effect the payment after waiting for the appeal period provided DoT does not prefer an appeal against the said award. However it is learnt that DoT has preferred an appeal in Delhi High Court against the Arbitrators award. The Company has accordingly recognized the total liability at Rs. 10,04,865/- (License fee of Rs.5 lacs and interest there on Rs.5,04,865/- up to 31.03.2011) and has provided a sum of Rs.32,897 being interest since the amount of Rs 9,71,968 had already been provided in the previous years. The difference in claim amounting to Rs.10, 77,366/- is shown under "claims against the company not acknowledged as debts".

(ii) Income Tax demand

The following is the status of the Income Tax matters which are pending for various assessment years. In all cases, the company has been admitting the income from its operations under the head "Income from Business". The Income Tax Department has however, assessed it under the head "Income from Other Sources". In respect of the assessment years, 1995-96,1996-97,1998-99, 2000-01, 2001-02 and 2003-04 the company has disputed this in the Appellate Forums before the Commissioner of Income Tax and thereafter before the Income Tax Appellate Tribunal. The matter has been decided in favour of the Company.

However, the Income Tax Department has disputed the same before the Honble High Court of Madras Juridicature for the Assessment years 1995-96, 1996-97,1998-99, 2000-01, 2001-02 and 2003-04. In the event of the decision not being in favour of the company, the tax initially demanded will be Rs.264.23

lacs along with penal interest till the date of passing the order which is not quantifiable at this point of time.

Considering that the orders of the higher authorities have been in favor of the company, the company has not provided any liability towards income tax demanded.

The Income Tax assessments are completed up to the AY 2007-2008. The necessary adjustments have been made to net off the advance tax paid and TDS receivable against the provision made for those years in respect of assessments were completed. The provision for Taxation and TDS & Advance are duly net off in the accounts.

(iii) Contingent liability not provided for:

During the year, the company has received a show cause notice from the Service Tax department on the applicability of service tax on Electricity charges reimbursed from the occupants including generation from Genset. The company based on a legal opinion, is opined that it shall not be liable for Service Tax on this issue. The company has obtained an interim order from the Madras High Court against the operation of the show cause notice issued by the Office of the Commissioner of Service Tax. This liability is contingent in nature and of materialization shall lead to outflow of Rs. 1,69,52,681/-.

(iv) During the year as well as in the previous year the company has received a persistent communication from ELCOT claiming a sum of Rs.9.56 crores towards difference in the computation of Lease Rent for the period from 14.02.1991 to 14.01.1999. The Company prima-facie has strong reason that the claim is not tenable and is evaluating various options,including legal recourse. Pending any such actions no provision has been made.

(v) Other pending items under dispute - NIL (P.Y. - NIL)

13. Previous years figures have been regrouped wherever required to conform to current year Figures which has no impact on the Pofit and Loss Account.


Mar 31, 2010

1. Secured Loans

a. Mortgage Loan

Primary Security

Assignment of rent receivables from all the present and future lessees of building situated at TS 140, Block 2 & 9 , Rajiv Gandhi Salai, Taramani, Chennai 600 113.

Collateral Security

Registered mortgage of commercial property belonging to the company situated at TS 140, Block 2 & 9, Rajiv Gandhi Salai, Taramani, Chennai -600 113 admeasuring land area of 3.16 acres with super built up area of 2.50 lacs sq.ft of ground floor + 7 floors.

First charge on other fixed assets of the company (including Windmill property).

2. Deferred Tax Liability / Asset

As per the Accounting Standard "AS 22" issued by the Institute of Chartered Accountants of India (ICAI), the Company is required to make a provision for "deferred tax liability / Asset". During the year an amount of Rs.21,57,719/- has been recognised for deferred tax asset.

3. CURRENT LIABILITIES

(A) The company continues to hold the amount of Rs.1,46,503/- on account of Interest payable on FD made out of disputed dividend for the years 2000-01 and 2001-02.

(B) There are no amounts due to the Central Government on account of Investor

Education and Protection Fund as on 31.3.2010. (The balance amount lying under the Unpaid Dividend Account 2002-03 declared on 30.9.2003 for the year 2002-2003 falls due on 29.09.2010.

(C) In the earlier years the Service Tax collected from the occupants have been grouped under Income and the service tax payments have been grouped under the Administrative Expenses in Profit and Loss Account. During the year both the service tax collected and paid have been grouped under Current liabilities after availing the input credit for the year and there is no impact on the Profit and Loss account.

4. PROFIT & LOSS ACCOUNT

(A) Other income from operations includes an amount of Rs.50,30,154/- (previous year Rs.47,08,464/-) from sale of electricity generated from windmill.

(B) Retirement benefits to employees

(i) Defined Contribution Plan

Provident fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employees Provident Fund scheme administer by Government of India equal to a specified percentage of the covered employees salary.

The Company recognized Rs.4,80,696/- for provident fund contribution in the profit and loss account. Further an additional contribution of Rs.1,03,838/- has been made to the Trust to meet the shortfall in managing the trust, being the "excess of expenditure over income".

(ii) Defined benefit plan

1) Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Elnet Technologies Ltd Employees Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

The following table set out the status of the gratuity plan as required under AS 15

5. a) There were no dues to Small Scale Industrial undertakings to whom the Company owes any sum which is outstanding for more than 30 days.

b) Outstanding dues to Micro , Small and Medium Enterprises

There are no Micro and Small Enterprises to whom the Company owes dues, which are outstanding for more than forty five days as at 31st March 2010. The identification of Micro and Small Enterprises and the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined on the basis of vendor information available with the company.

6. Segment wise reporting as per standard AS 17 is not applicable to the company

7. Estimated amount of liability on capital contracts as on 31.03.2010 not provided for is Rs.1,17,485/-(Previous year Rs. 8,32,165/-)

8. Contingent Liabilities in respect of:

a) Claims against the Company not acknowledged as debts

(i) Claim by Department of Telecommunication

The Department of Telecommunication (DoT) filed a claim against the company for Rs.20,82,233/- before the Sole Arbitrator in the matter of payment towards license fees and interest thereon. The Arbitrators award was made in June 2005 according to which a sum of Rs.5,48,288 and interest there on is payable by the company to DoT The company has accepted the award and had decided to effect the payment after waiting for the appeal period provided DoT does not prefer an appeal against the said award. However it is learnt that DoT has preferred an appeal in Delhi High Court against the Arbitrators award. The Company has accordingly recognized the total liability at Rs.9,71,970/-(License fee of Rs.5 lacs and interest there on Rs.4,71,970/- upto 31.03.2010) and had provided a sum of Rs.32,897/- being interest since the amount of Rs.9,39,071/- had already been provided in the previous years. The difference in claim amounting to Rs. 11,10,263/- is shown under "claims against the company not acknowledged as debts".

(ii) Income Tax demand

The following is the status of the Income Tax matters which are pending for various assessment years. In all cases, the company has been admitting the income from its operations under the head "Income from Business". The Income Tax Department has however, assessed it under the head "Income from House Property" / "Income from Other Sources". In respect of the assessment years, 1995-96, 1998-99, 2000-01, 2001-02 and 2003-04 the company has disputed this in the Appellate Forums before the Commissioner of Income Tax and thereafter before the Income Tax Appellate Tribunal. The matter has been decided in favour of the Company.

However, the Income Tax Department has disputed the same before the Honble High Court of Madras Juridicature for the Assessment years 1995-1996,1997-1998, 1998-1999, 2000-01, 2001-02 and 2003-04 and in respect of Assessment year 2007-08 is pending before the Commissioner of Income Tax (Appeals). In the event of the decision not being in favour of the company, the tax initially demanded will be Rs.264.23 lacs along with penal interest till the date of passing the order which is not quantifiable at this point of time.

Considering that the orders of the higher authorities have been in favor of the company, the company has not provided any liability towards income tax demanded.

The Income Tax assessments are completed up to the AY 2007-2008 barring the AY 2006-07.

Since the assessment for the assessment years 2005-06 and 2007-08 is over u/s. 143 (3) rws147 and u/s 143(3) of the Income Tax Act, 1961, respectively, the necessary adjustments have been made to net off the advance tax paid and TDS receivable against the provision made for these years.

(iii) Contingent liability not provided for:

During the year, the company has received a show cause notice from the Service Tax department on the applicability of service tax on Electricity charges reimbursed from the occupants including generation from genset. The company based on a legal opinion, is opined that it shall not be liable for Service Tax on this issue. The company has obtained an interim order from the Madras High Court against the operation of the show cause notice issued by the Office of the Commissioner of Service Tax. This liability is contingent in nature and of materialization shall lead to outflow of Rs. 1,21,40,756/-

(iv) During the year the company has received a communication from ELCOT claiming a sum of Rs.9.56 crores towards difference in the computation of Lease Rent for the period from 14.02.1991 to 14.01.1999. The Company prima-facie has strong reason that the claim is not tenable and is evaluating various options, including legal recourse.

Pending any such actions no provision has been made.

(v) Other pending items under dispute - NIL (P.Y - NIL)

9. Previous years figures have been regrouped wherever required to conform to current year figures.

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